Direct comparison
FOB vs CIF: Risk, Freight and Insurance
FOB vs CIF under Incoterms 2020: where risk passes, who pays ocean freight, and whether CIF insurance covers medical shipments (Clause C vs CIP, CPT).
Written and maintained by CASRAI Editorial Board
Last updated
Ask CASRAI · free to try
Ask about FOB vs CIF: Risk, Freight and Insurance
Ask your first 2 questions free below. Subscribers get 150 a day for $29 a month.
An AI assistant specialized in research administration. It cites the sources behind every answer, labels web answers and says when it can't answer.
Answers draw on CASRAI's guides and dictionary plus the federal and funder documents we index: Federal Register, Grants.gov, Regulations.gov and UKRI.
Works on this site and inside Claude, Cursor and the AI tools you already use.
Everything CASRAI publishes — this page, the dictionary, the guides and the news — stays free to read, with no account and no card.
How do FOB, CIF compare side by side?
The table below compares FOB, CIF across 11 procurement-relevant dimensions, from full name (trade.gov) through source.
Side-by-side comparison
| Dimension | FOB | CIF |
|---|---|---|
| Full name (trade.gov) | Free on Board (insert named port of loading) | Cost Insurance and Freight (insert named port of destination) |
| Transport mode | Sea or inland waterway only. trade.gov counts FOB among the four sea/inland-waterway rules. | Sea or inland waterway only; the ICC calls CIF "reserved for use in maritime trade". trade.gov also counts it among the four sea/inland-waterway rules. |
| Where the seller delivers | On the vessel at the agreed port of shipment (ICC Academy). | On board the vessel at the named port of shipment (ICC Academy). |
| Where risk passes to the buyer | Once the goods are loaded onto the vessel at the port of shipment. | Once the goods are loaded on board the vessel at the port of shipment, even though the seller pays carriage to the port of destination. Under C rules risk does not transfer on arrival at destination (ICC Academy). |
| Main (ocean) carriage | ICC Academy's FOB worked example has the buyer's contracted ocean carrier move the goods from the port of shipment. | The seller must arrange and pay for maritime or inland-waterway carriage up to the port of destination. |
| Insurance | ICC Academy's FOB article describes no seller insurance obligation; it names insurance responsibility as a point for CIP and CIF. | The seller must arrange insurance up to the port of destination at Institute Cargo Clauses (C), "minimum cover", or similar. The ICC says Clause (C) remains the default and the parties are free to agree higher cover. |
| Export formalities | The seller completes export clearance at the port of shipment. | The seller completes export formalities (ICC Academy). |
| Edition | Incoterms 2020. trade.gov: sales contracts should reference the Incoterms 2020 rules. | Same edition point. The 2020 edition requires higher cover for CIP but keeps Clause (C) as the CIF default, so CIF and CIP now differ on cover. |
| Any-mode counterpart | FCA (any mode, discussed in ICC Academy alongside FOB). | CIP (any mode): Clauses (A) cover, seller pays carriage and insurance to the agreed destination. CPT: carriage paid, no seller insurance duty. |
| When ICC Academy describes using it | When the shipment is port-to-port by sea or inland waterway and the seller commits to deliver on board at the agreed port with export formalities done. | When the seller commits to deliver on board at the port of shipment, including export formalities and insurance to the agreed port of destination at Clause (C) cover. |
| Source | ICC Academy, FCA & FOB Incoterms 2020 explained (read 2026-10-31); trade.gov Know Your Incoterms (read 2026-10-31). | ICC Academy, CIF & CIP Incoterms 2020 explained (read 2026-10-31); ICC Incoterms 2020 page (read 2026-10-31). |
Common questions
Common questions about FOB vs CIF
Does CIF include insurance for medical shipments?
+
Yes, the CIF rule itself requires the seller to arrange insurance up to the named port of destination, but at Institute Cargo Clauses (C), which ICC Academy calls minimum cover; the ICC says parties are free to agree higher cover. The rule is the same whatever the goods are, so a contract for medical or laboratory shipments that needs broader cover must say so. CIF applies to sea and inland-waterway transport only. Sources: ICC Academy CIF & CIP article and ICC Incoterms 2020 page, read 2026-10-31.
CIF vs CIP vs CPT?
+
All three are "C" rules: the seller pays carriage to the named destination but risk passes on the origin side. CIF is sea and inland waterway only, risk passes on board the vessel, and insurance is Clause (C). CIP is any mode, risk passes when goods are handed to the carrier hired by the seller, and insurance is Clauses (A); ICC Academy puts the minimum at 110% of the contract price. CPT is any mode with carriage paid but no seller duty to insure. Sources: ICC Academy CIF & CIP and CPT & CIP articles, read 2026-10-31.
CPT vs CIP: what is the difference?
+
Insurance. Under CPT the seller is not obligated to provide insurance, and the buyer carries insurance cost and risk after handover to the carrier. Under CIP the seller must contract and pay for insurance covering the goods during carriage to the agreed destination, at Institute Cargo Clauses (A). Both are any-mode rules and risk passes at delivery to the carrier. Source: ICC Academy CPT & CIP article, read 2026-10-31.
